MGNREGS running out of funds

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Part of: GS Prelims and Mains II – Government policies and interventions for development; Welfare/Social schemes 


  • It stands for Mahatma Gandhi National Rural Employment Guarantee Act, 2005 
  • It guarantees 100 days of wage employment in a financial year to a rural household whose adult members (at least 18 years of age) volunteer to do unskilled work. 
  • It has unique legal architecture of being demand-driven, and not budget constrained. 
  • It is social security and labour law that aims to enforce the ‘right to work’. 
  • It has provision for unemployment allowance, when the state cannot provide work 
  • Agriculture and allied activities constitute more than 65% of the works taken up under the programme. 
  • MGNREGA has helped build rural infrastructure through approximately 10 crore families. 

Problems facing MGNREGA 

  • Governments capping its financial resources and turning it into supply-based programme 
  • Workers had begun to lose interest in working under it because of the inordinate delays in wage payments. 
  • With very little autonomy, gram panchayats found its implementation cumbersome 
  • As a result, over the last few years, MGNREGA had begun to face an existential crisis. 

New concerns: 

  • The Scheme has already used up almost half its allocated funds. 
  • It spent more than ₹48,500 crore out of the expanded ₹1 lakh crore allocation announced (during COVID outbreak) 
  • In several Gram Panchayats, the approved projects have already been exhausted. 
  • A number of gram panchayats in vulnerable areas have already exhausted their funds for the scheme. 

Measures needed: 

  • Centre should allocate another ₹1 lakh crore to the scheme 
  • It has to double the permitted work limit to 200 days per household. 

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